Effects of Exploration and Mining Risks on the Insurance Industry in Kenya
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Date
2013-11Author
Mitoko, David O
Type
ThesisLanguage
enMetadata
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ABSTARCT
Africa has considerable oil and gas resources that can help accelerate growth in the
continent if used strategically. Although new reserves are being discovered
progressively they are not equally distributed; indeed thirty eight out of fifty four
African countries are currently net oil exporters (BP statistical review of world energy
June 2013). Proper utilization of these resources therefore presents an opportunity to
be pursued and an obstacle to be tackled by African continents including Kenya.
Kenya recently joined the league of oil producing nations with its oil reserve in
Northern frontiers meeting the benchmark for commercial exploitation but with these
discoveries come insurable risks. The objectives of this study therefore was to
establish the effects and benefits of mining and exploration risks on the insurance
industry in Kenya and the challenges associated with handling these risks. This was
an exploratory study hence survey method was used to identify these effects and
challenges. The Target population included the 45 licensed insurance companies in
Kenya, five reinsurance companies domiciled in Kenya, two direct insurance brokers
and two reinsurance brokers. Primary data for the study was collected using self
administered questionnaire and data analyzed using descriptive statistics such as
frequencies, mean scores and cumulative frequencies Main finding of the study is that
training and capacity building is fundamental to the insurance industry exploiting the
vast potential of this resource otherwise fronting arrangements and capital flight to
foreign insurance and reinsurance companies is inevitable. This is the first study on
this subject and further research would is recommended as the country and the
insurance industry start to realize the impact of oil and gas exploration and mining
Citation
A research project submitted in partial fulfilment of the requirements for the award of the degree of master in business administration, school of business, University of NairobiPublisher
School of business administration deaprtment, University of Nairobi